Chapter 13. The Complete Reference

Every formula. Every definition. Every framework. One document. About This Document

The One Source of Truth

Chapters 1 through 12 told the story. Characters, drama, tension, narrative arc. They made finance memorable. This document strips all of that away. No narrative. No characters. No plots. Pure technical content, every concept, formula, framework, and definition from the entire G2G series, compressed for revision, exams, and interview preparation. 16 Sections 120+ Glossary Terms 60+ Formulas 80+ Acronyms 8 pages of pure reference material. Print it. Highlight it. Memorise it. Section 0 Quick Reference

Fund Economics & GP/LP Structure

The Basic Deal: LPs (limited partners) invest capital into a blind pool. GPs (general partners) manage the fund, make investment decisions, and share in profits. Capital calls: LPs commit capital; GP draws it down as needed Management fee: 2% of committed capital (Years 1 to 5), 2% of invested (Years 6 to 10) Carried interest: GP keeps 20% of profits after hurdle Hurdle rate: 8% preferred return to LPs before carry begins Blind pool: LPs don't know which companies before investing Carry Waterfall Formula Carry = 20% × (Total Distributions − Capital Called − Preferred Return) Return Metrics DPI = Distributions Paid / Capital Invested RVPI = Remaining Value / Capital Invested TVPI = (DPI + RVPI), Total Value to Paid-In Capital J-Curve: Fund returns are negative in years 1 to 3 (management fees drag), then climb as exits happen. Total TVPI should reach 1.5x–2.5x by exit. Sections I–II Quick Reference

Income Statement & Cost Structure

Income Statement Cascade Revenue − COGS (Cost of Goods Sold) = Gross Profit − OpEx (Selling, General, Admin) = EBITDA (Earnings Before Interest, Taxes, D&A) − D&A (Depreciation & Amortisation) = EBIT (Operating Profit) − Interest Expense − Taxes = Net Income Key Margin Formulas Gross Margin % = (Revenue − COGS) / Revenue EBITDA Margin % = EBITDA / Revenue EBIT Margin % = EBIT / Revenue Net Margin % = Net Income / Revenue Breakeven & Operating Leverage Breakeven Units = Fixed Costs / (Price − Variable Cost per Unit) Contribution Margin = (Revenue − Variable Costs) / Revenue DOL = % Change in EBIT / % Change in Revenue Real example: Königshof (manufacturing) EBITDA margin ~22%. Subtrax (SaaS) EBITDA margin ~35%. Manufacturing has higher fixed costs; SaaS has higher variable costs but bigger operating leverage once scaled. Sections III–IV Quick Reference